Aditya Birla Fashion to sell Reebok merchandise in India; stock surges 6%

This deal marks a foray for ABFRL into India's fast-growing sports and activewear segment.

Shares of Aditya Birla Fashion and Retail (ABFRL) moved higher by 6 per cent to Rs 281 on the BSE in Tuesday's intra-day trade after the company said its board has in-principally approved acquiring the exclusive online and offline rights to the global brand 'Reebok' for the Indian market. This deal marks ABFRL's foray into India's fast-growing sports and activewear segment.

The board also approved the purchase of certain assets of 'Reebok India Company' including inventory, currents assets/liabilities by way of entering into a licensing agreement and a purchase agreement, respectively.

"Authentic Brands Group (ABG), a global brand development, marketing and entertainment company, and ABFRL, India's leading fashion company, today announced the signing of a long-term licensing agreement, which grants ABFRL exclusive rights to distribute and sell Reebok products through wholesale, e-commerce and Reebok branded retail storesin India and other ASEAN countries," ABFRL said in a press release.

The transaction marks a significant milestone in the journey of ABFRL, which has evolved its portfolio into a powerhouse of brands across all major fashion and lifestyle segments overthe last several years. The addition of Reebok, a marquee global sports and activewear brand will fill an important white space inABFRL's portfolio, the company said. READ ABOUT IT HERE

The proposed transaction is subject to the successful completion of due diligence, necessary statutory approvals and signing of definitive agreements. The transfer of ownership of the Reebok brand from adidas to ABG is expected to close in Q1 of 2022.